The following is the story of how my wife, Kim, my best friend, Larry, and I began our journey from broke, to rich, to retired in less than ten years. I tell this story to encourage any of you who may be doubtful or in need of some self-confidence to begin the journey to retiring young. When Kim and I started, we were nearly out of money, low on confidence, and filled with doubt. We all have doubts. The difference is what we do with those doubts.
The Journey Begins
In December of 1984, Kim, my best friend, Larry Clark, and I were skiing in Vancouver, British Columbia, on Whistler Mountain. The snow was very deep, the runs were long, and the skiing was excellent, although very cold. At night, the three of us sat in a little cabin that was snuggled in between tall pines, barely visible because the snow was up to the roof.
Sitting around the fire every night, we would discuss our plans for the future. We had very high hopes but very little resources. Kim and I were on our last few dollars and Larry was in the process of building another business. Our discussions ran late into the night, every night. We discussed books we had recently read as well as movies we had seen. We listened to educational audiotapes we had brought along and then discussed the lessons on those tapes in depth.
On New Year’s Day, we did what we do every year, we set our goals for the coming year. But this year our goal-setting session was different. Larry wanted to do more than just set goals for the coming year. Instead of discussing just our goals for the year, he wanted us to set goals that changed our lives by changing our realities. He said, “Why don’t we write a plan on how we can all become financially free?”
I listened to his words and heard what he said. But I could not fit what he said into my reality. I had talked about it, dreamed about it, and knew that someday I would do it. But the idea of being financially free was always an idea in the future, not today…so the idea did not fit. “Financially free?” I said. The moment I heard my voice I knew how much of a wimp I had become. My voice did not sound like the old me.
“We’ve talked about it many times,” Larry said. “But I think it is time to stop talking, stop dreaming, and start committing. Let’s write it down. Once we write it down you know we have to do it. Once we write it down, we’ll support each other on this journey.”
Being almost out of money, Kim and I looked at each other. The glow from the fire illuminated the doubt and uncertainty on our faces. “It’s a good idea but I think I would rather just focus on surviving for the next year.” I had just left the nylon and Velcro wallet business. After it had crashed in 1979, I had spent the next five years rebuilding it and then walked away from it. I walked away early because the business had changed drastically. We were no longer manufacturing in the United States. In order to compete with increasing competition, we had moved our factories to China, Taiwan, and Korea. I left the business because I could no longer stand the idea of using sweatshop child labor to make me rich. The business was putting money in my pocket, but it was taking life out of my soul. I was also not getting along with my partners. We had grown apart and did not see eye to eye. I walked away with very little equity. I just could not continue to work in a business that violated my spirit and with partners I could not talk to. I am not proud of how I left, yet I knew it was time to leave. I had been there for eight years and I had learned a lot. I learned how to build a business, how to destroy a business, and then how to rebuild it. Although I walked away with very little money, I did walk away with priceless education and experience.
“Come on,” said Larry. “You’re being a wimp. Instead of setting simple one-year goals, let’s go for it. Let’s set a big multiyear goal. Let’s go for freedom.”
“But we don’t have much money,” I said, looking over at Kim, whose face reflected my concerns. “You know we’re starting over again. All we want to do is survive for the next six months and maybe a year. How can we think about financial freedom when all I can think about right now is financial survival?”
Again I was shocked at how wimpy I sounded. My self-confidence was really low. My energy was really low.
“Even better. Think of this as a fresh start,” Larry was now on it. He would not stop.
“But how can we retire early when we don’t have any money?” I protested. I could hear more and more of the wimp in me coming out. I felt weak inside and did not want to commit to something just yet. I did just want to survive for the financial short term and not think about the future.
“I did not say we were going to retire in a year,” said Larry, now irritated with my wimpy responses. “All I am saying is let’s plan on retiring now. Let’s write down the goal, create a plan, and then focus on the idea. Most people do not think about retiring until it’s too late… or they plan on retiring when they’re sixty-five. I don’t want to do that. I want a better plan. I don’t want to spend my life working just to pay bills. I want to live. I want to be rich. I want to travel the world while I am young enough to enjoy it.”
As I sat there listening to Larry sell me on the benefits of setting such a goal, I could hear the little voice inside of me telling me why setting a goal to be financially free and retiring early was unrealistic. It even sounded impossible. Larry continued. He did not seem to care if Kim or I were listening so I tuned him out as I began to think about what he had said. Silently, I said to myself, “Setting a goal to retire early was a good idea…so why am I fighting it? It is not like me to fight a good idea.”
Suddenly, in my silence, I began to hear my rich dad saying, “The biggest challenge you have is to challenge your own self-doubt and your laziness. It is your self-doubt and your laziness that define and limit who you are. If you want to change what you are you must take on your self-doubt and your laziness.
It is your self-doubt and laziness that keep you small. It is your self-doubt and laziness that deny you the life you want.” I could hear rich dad driving home his point, saying, “There is no one in your way except you and your doubts about you. It is easy to stay the same. It is easy not to change. Most people choose to stay the same all their lives. If you will take on your self-doubt and your laziness, you will find the door to your freedom.”
Rich dad had had this talk with me just before I left Hawaii to come on this trip. He knew I was probably leaving Hawaii for good. He knew I was leaving my home and a place I felt very comfortable in. He knew I was venturing out into the world without any guarantees of security. Now just a month after my talk with rich dad, I found myself sitting on this tall snow-covered mountain, feeling weak, vulnerable, and insecure, listening to my best friend telling me the same things. I knew it was time to grow up or give up and go home. I realized that it was this moment of weakness on the mountains that I had come for. It was decision time once again. It was time to choose. I could let my self-doubt and laziness win or I could go on and change my perceptions about myself. It was time to move forward or to go backward.
As I tuned back into Larry talking about freedom I realized that he was not really talking about freedom. At that moment, I came to realize that taking on my self-doubt and my laziness was the most important thing I could do. If I did not take it on, my life would go backward.
“Okay, let’s do it,” I said. “Let’s set the goal to be financially free.” That was New Year’s Day 1985. In 1994 Kim and I were free. Larry went on to build his company, which became one of Inc. magazine’s fastest-growing companies of the year in 1996. Larry retired in 1998 at the age of forty-six after selling his company and took a year off.
How Did You Do It?
Whenever I tell this story, the question I am asked is, “How? How did you do it?”
I then say, “It’s not about how. It is about why Kim and I did it.” I go on to say, “Without the why, the how would have been impossible.” I could go on to tell you how Kim, Larry, and I did it, but I won’t. How we did it is not that important. When it comes to how we did it, all I will say is that from 1985 to 1994, Kim, Larry, and I focused on rich dad’s three paths to great wealth, which are:
1. Increasing business skills
2. Increasing money management skills
3. Increasing investment skills
There are many books written on each of these paths, and if I did the same, this would be just another how to book. But what I think is more important than how to, is the why we did it, and the why is because I wanted to challenge my own self-doubts, my laziness, and my past. It was the why that gave us the power to do the how.
Rich dad often said, “Many people ask me how to do something. I used to tell them until I realized that even after I told them how I did something, they often did not do it. I then realized that it was not the how to but why I do something that is more important. It is the why that gives you the power to do the how to.” He also said, “The reason most people do not do what they can do is because they do not have a strong enough why. Once you find the why, it is easy to find your own how to to wealth. Instead of looking inside of themselves to find their own why they want to become rich, most people look for the easy road to wealth, and the problem with the easy road is that the easy road usually ends in a dead end.”
Arguing with Myself
That night, sitting in the cold mountain cabin, listening to Larry, I found myself silently arguing with him. Every time he said, “Let’s set it as a goal, write it down, and create a plan,” I could hear myself arguing in response, saying such things as:
1. “But we don’t have any money.”
2. “I can’t do that.”
3. “I’ll think about it next year, or once Kim and I get settled.”
4. “You don’t understand our situation.”
5. “I need more time.”
Over the years, my rich dad had taught me many lessons. One of the lessons was, “If you find yourself arguing with a good idea, you may want to stop arguing.”
That night as Larry went on and on about getting rich and retiring early, I again heard rich dad warning me about arguing against a good idea. Explaining further, rich dad said, “Whenever someone says something like ‘I can’t afford it’ or ‘I can’t do it’ to something they want, they have a big problem. Why in the world would someone say, ‘I can’t afford it’ or ‘I can’t do it’ to something they want? Why would someone deny themselves the things they want? It makes no logical sense.”
As the fire crackled in the fireplace, I found myself arguing against something I wanted. “Why not retire rich and retire early?” I finally asked myself. “What would be wrong with that?” My mind began to open slowly and I repeated silently to myself, “Why am I arguing against the idea? Why am I arguing against myself? It is a good idea. I have talked about it for years. I did want to retire by thirty-five and now I’m soon to be thirty-seven years old and I’m not even close to retiring. In fact, I’m nearly broke. So why am I arguing?”
Once I said that to myself, I realized why I had been arguing against a good idea. At the age of twenty-five, I had planned on becoming rich and retiring between ages thirty to thirty-five. It was my dream. But after losing my Velcro wallet business the first time, my spirit was crushed and I had lost much self-confidence. That night sitting by the fire, I realized it was my lack of self-confidence that was doing the arguing. I was arguing against a dream I wanted. I was arguing because I did not want to feel disappointed again. I was arguing because I was protecting myself from the pain that dreaming big dreams can bring if that big dream does not become reality. I had dreamed and failed. That night I realized that I was arguing against failing again, not against the dream.
“Okay, let’s set a big goal,” I said quietly to Larry. I had finally stopped arguing against a good idea. The argument was still there but I was not going to let the argument stop me. After all, it is only an argument I was having with myself and no one else. The little person in me was arguing against the person that wanted to grow up and be bigger. “Good,” said Larry. “It’s about time you stopped being such a wimp. I was really getting worried about you.”
The reason I had decided to do it was because I had found my why. I knew why I was going to do it, even though at that moment I did not know how I was going to do it.
Why I Decided to Retire Early
How many of you have ever on occasion said to yourself, “I am sick and tired of myself “? Well that New Year’s Eve, sitting around the fire with Kim and Larry, I got sick and tired of my old self and decided to change. It was not just a mental change; it was a change that came from deep inside. It was time for a big change and I knew I could change because I found out why I wanted to change. The following are some of my personal whys…why I decided to go for retiring young and retiring rich:
1. I was fed up with being broke and always struggling for money. I had been rich for a brief moment with my wallet business, but after the business crashed, I was back to struggling again. Although my rich dad had taught me well, I still only had his lessons. I had still not become rich and it was time for me to become rich.
2. I was tired of being average. Through school, teachers said, “Robert is a bright boy but he just does not apply himself.” They also said, “He’s bright but he’ll never be as smart as the gifted kids. He is just above average.” That night sitting on the mountain, I got sick and tired of being average. It was time for me to stop being average.
3. When I was eight years old, I came home and found my mom crying at the kitchen table. She was crying because we were buried under a mountain of bills. My dad was doing the best he could to earn more money, but as a schoolteacher, he wasn’t doing so well financially. All he would say was, “Don’t worry, I’ll handle it.” But he didn’t. The way my dad handled it was by going back to school, working harder, and waiting for his annual pay raise. Meanwhile, the bills kept piling up and my mom felt more and more alone with no one to turn to. My dad did not like to discuss the subject of money, and if he did, he only got angry. I remember deciding at the age of eight to find the answers that could help my mom. That night sitting on the mountain, I realized that I had found the answers I had searched for since the age of eight. It was now time to take those answers and turn them into reality.
4. The most painful why of all was the reality that I now had a beautiful young woman in my life, Kim. I had met my soul mate and she was in this financial mess because she loved me. That night on the mountain I realized that I was doing to Kim what my dad had done to my mom. I was repeating a family pattern. At that moment, I found my real why.
So those are my whys. I wrote them down that night and kept them in a secret place. For those of you who read my second book, Rich Dad’s CASH-FLOW Quadrant, you may recall that things got worse for us once we left the mountain. I started that book by telling the story of Kim and me living in a car for about three weeks after our money ran out. So things did not get better just because we made the decision to retire rich, but it was the reasons why that kept us going.
Things did not go well for Larry either after leaving the mountain. He too had substantial financial setbacks in the late 1980s, yet his whys kept him going.
A suggestion: I learned years ago that passion is a combination of love and hate. Unless someone has a passion for something, it is difficult to accomplish anything. Rich dad used to say, “If you want something, be passionate. Passion gives energy to your life. If you want something you do not have, find out why you love what you want and why you hate not having what you want. When you combine those two thoughts, you will find the energy to get off your seat and go get anything you want.”
So you may want to start with a list comparing loves and hates. For ex-ample, I would create the following list:
Being rich Being poor
Being free Being required to work
Buying anything I want Not having what I want
Expensive things Cheap things
Having other people do Doing things I don’t want to do
what I don’t want to do
I found out as my rich dad did that I cannot tell anyone how to get rich. I now first ask people why they want to become rich. Without a strong enough why, even the easiest how to get rich will be too hard. There are many, many, ways to get rich…but there are only a few personal reasons why you want to get rich. Find your why and then you will find your how. As the old saying goes, “Where there is a will there is a way.” For me, I would say finding my will made finding my way possible. Without the will, the way would have been way too hard.
My suggestion is, you may want to start your list of loves and hates in the space listed below. If you need more space, which I hope you do, find a much larger sheet of paper. May you live your life with more and more passion.
So sit quietly to find and define your loves and hates. Then write down your whys. Write down your dreams, goals, and plans on becoming financially free, retiring early, and retiring as young as possible. Once it is in writing, you may want to show it to a friend who will support you in achieving your dreams. Take a look at this paper with your dreams, goals, and plans on a regular basis, talk about it often, ask for support, be willing to continually learn, and before you know it, things will begin to happen.
As a final comment, I have heard many people say, “Money does not make you happy.” That statement has some truth to it. But what money does do is buy me the time to do what I love and pay other people to do what I hate doing.
Authors Details: Excerpt – Rich Dad’s Retire Young, Retire Rich: How to Get Rich Quickly and Stay Rich Forever! by Robert T. Kiyosaki and Sharon L. Lechter C.P.A.